Biofuels Development Status and Potentials in Major Countries Michael Wang Center for Transportation Research Argonne National Laboratory Oct. 10, 2006

A Complete, Robust Way Of Evaluating A Fuel’s Effects Is To Compare the Fuel With Those To Be Displaced

Accurate Ethanol Energy Analysis Must Account for Increased Productivity in Farming Over Time 0.30 0.35 0.40 0.45 0.50 0.55 0.60 0.65 1965 1970 1975 1980 1985 1990 1995 2000 2005 Bushels/lb. Fertilizer ? Precision farming, etc.? U.S. Corn Output Per Pound of Fertilizer Has Risen by 70% in The Past 35 Years Based on historical USDA data; results are 3-year moving averages

Improved Technology Has Reduced Energy Use and Operating Costs in Corn Ethanol Plants From Argonne’s discussions with ethanol plant designers, USDA data, and other reported data

The Type of Energy, As Well As the Amount of Energy, Is important in Addressing Energy Effects of Ethanol Btu required for 1 Btu available at fuel pump Fossil Btu = 1.23 Energy in the Fuel Petroleum Btu = 1.1 Fossil Btu = 0.74 This slide summarizes the energy required to produce gasoline and ethanol. Only a small amount of petroleum and a similar amount of coal or natural gas is consumed in the process of making gasoline. The overall conversion is nominally 81% efficient. The fuel-to-petroleum ratio in this case is 0.9. This ratio is the amount of energy in fuel (gasoline in this case) delivered to the end user divided by the amount of energy in crude oil and energy in process fuels required to produce the finished fuel product (gasoline in this case). A ratio of less than 1.0 simply means that this is not an option for reducing our dependence on petroleum. For ethanol, the energy analysis depends on whether the ethanol is made from corn or cellulosic biomass. For corn ethanol, the largest source of energy input is the corn itself. Corn accounts for roughly 60% of the total energy input; the energy in corn comes from solar energy during photosynthesis of corn plant growth. About 30% of energy input is from coal or natural gas used to provide heat and power for the conversion. Less than 10% of the total energy input comes from petroleum to power the farm equipment, vehicles, and/or trains. The overall efficiency is 57%. The fuel-to-petroleum ratio is roughly 10; which means 10 btus of corn ethanol requires only about 1 btu of petroleum. This makes corn ethanol a very effective option for reducing our dependence on petroleum. This chart illustrates that although corn ethanol requires a fair amount of fossil energy input, most of it is in the form of coal or natural gas, not petroleum. In the case of cellulosic ethanol, the portion of energy coming from biomass increases dramatically; the energy in biomass comes from solar energy during photosynthesis of biomass growth. This is because the lignin portion of the biomass is used to supply all the heat and power for the biorefinery, which almost eliminates the need for coal or natural gas. As with corn, the largest source of energy required is the energy in the cellulosic biomass itself. In this case, the biomass accounts for roughly 90% of the total energy input. The other 10% of energy input is mainly petroleum products. The overall efficiency is 45%, and the fuel-to-petroleum ratio remains close to 10. Cellulosic ethanol is also a very effective option for reducing our dependence on petroleum. The key message is that ethanol is a very effective option for reducing our dependence on petroleum, regardless of whether it is made from corn or cellulosic ethanol. Another important message is that petroleum refining is a very mature technology. The conversion technology has benefited from more than a century of improvements. Corn ethanol technology used today is far more efficient than what was used 20 years ago, and it is still improving. Cellulosic ethanol is not even a commercial process. The efficiency reported here is based on technology projection of future commercial cellulosic ethanol plants. This process efficiency can and will improve as the technology improves and free-market competition drives the industry toward higher and higher overall conversion efficiency. For any fuel, delivered energy will always be less than total energy input. But as technologies mature, this efficiency can be expected to continuously improve, very substantially in the early years of commercialization. From this chart, one should realize the type of energy, as well as the amount of energy, is important in addressing energy effects of different fuel products. Fossil Btu < 0.1 Petroleum Btu = 0.1 Petroleum Btu = 0.1

Most Recent Studies Show Positive Net Energy Balance for Corn Ethanol Wang GREET w/Pimentel Assumptions Energy balance here is defined as Btu content a gallon of ethanol minus fossil energy used to produce a gallon of ethanol

Though Electricity Requires a Large Amount of Fossil Energy Input, There Is No Substitute Coal Mining Coal Transportation NG Processing Transmission Recovery Diesel Fuel Electricity LPG, NGLs Electricity Generation Electricity Transmission and Distribution (8% loss) 1 mm Btu of Electricity at Wall Outlets Uranium Ore Recovery Petroleum Recovery Uranium Petroleum Uranium Ore Other Products Residual Oil Uranium Enrichment Petroleum Refinery Refinery Gas Uranium Fuel Transportation Residual Oil Transportation U.S. Electricity Generation: 2.34 mm Btu Fossil Energy Input

Energy in Different Fuels Can Have Very Different Qualities Increase in Energy Quality Fossil Energy Ratio (FER) = energy in fuel/fossil energy input 10.31

The Role of Biofuels Is Affected by Land Availability and Oil Use in Individual Countries Country Land Area,103 km2 Population, Million Arable Land, 103 km2 Arable Land km2 per 103 people Oil Use, mil. barrels a day USA 9,161 296 1,752 5.92 20.0 China 9,326 1,306 1,436 1.10 6.3 Japan 374 127 46 0.36 5.6 Germany 349 82 118 1.44 2.7 India 2,973 1,080 1,617 1.50 2.3 Canada 9,093 32 451 14.09 2.2 Brazil 8,457 186 588 3.16 2.1 France 545 60 183 3.05 The U.K. 241 57 0.95 1.7 Spain 499 40 130 3.25 1.5 Thailand 511 65 150 2.31 0.9 Australia 7,617 20 24.95 0.8 Pakistan 778 162 216 1.33 0.4 Sweden 410 9 27 3.00

Intermediate Products Can Be Produced from Various Feedstocks via Various Technologies

Bio-Fuels Can Be Produced from Intermediate Products with Various Technologies

Feedstocks for Biofuel Production Vary Among Countries Grain starch to ethanol Corn in U.S., China, Canada Wheat in Europe, Australia, and Canada Sugar crops to ethanol Sugarcane in Brazil, India, and Thailand Sugar beets in Europe Cellulosic biomass to ethanol Managed biomass such as trees and grass Crop residues such as corn stover, wheat straw, rice straw, sugarcane bagasse Forest wastes Municipal solid waste Oilseed crops to biodiesel Soybeans in U.S. Rapeseeds in Europe Palm oil and other tropical oilseed crops in tropical countries Waste cooking oil Animal fats

Liquid Biofuels Can Be Used in Vehicles at Low- or High-Level Blends Low-level blends of ethanol/gasoline can be used in gasoline vehicles without vehicle modifications E5 in Canada and Australia E3 in Japan E6-E10 in U.S. E10 in China and Thailand E25 in Brazil Low-level and high-level blends of biodiesel/diesel can be used in diesel vehicles without vehicle modifications B2-B20 in different countries B100 could be used Flexible-fuel vehicles (FFVs) for E0-E85 require vehicle modifications

No.1 Ethanol Consumption Country with 4.2 billion gallons in 2005 U.S. Corn Ethanol: No.1 Ethanol Consumption Country with 4.2 billion gallons in 2005

Source: Renewable Fuels Association U.S. Fuel Ethanol Production Has Experienced Large Increases, and the Trend Will Continue 2005 Energy Bill requirement Actual Use Source: Renewable Fuels Association

A Large Number of E85 FFVs Are in U.S. Fleet Obtain fuel economy credits since 1993 >5 million cars and trucks in use in 2005 But they are powered virtually with gasoline

General Motors Corporation’s E85 FFV Vehicle Production for U.S. Forecast Production Approx. 1,500,000 E85 FFV Trucks produced through 2005 MY

Brazilian Sugarcane Ethanol: No.2 Ethanol Consumption Country with ~4 Billion Gallons in 2005

Brazil Is the Largest Sugarcane Producing Country Humid equatorial Dry winter/humid summer tropical Semi-arid tropical Humid coastal Humid subtropical

Brazil Has the Lowest Production Cost for Sugar Production costs in Brazil reached 100 US$/ton in 2005 Sugar Production Cost Estimated Cost (US$/Ton in Dec/00) Sugar Cane Production (Mt) 2002 22,7 5,4 2,6 19,0 2,3 6,6 5,1 7,3 10,3 1,5 0,9 100 From Rainach (2006) %

Brazil’s Low Sugar Production Cost Is Due to a Combination of Factors Cuba India Australia Brazil cost (US$/Ton) 283 248 204 100 WATER LIGHT - TEMPERATURE USABLE LAND LABOR COST SCALE OF PRODUCTION GENETICS AGRICULTURAL TECHNOLOGY STRONG WEAK From Rainach (2006)

Brazil Now Uses About 4 Billion Gallons of Sugarcane Ethanol A Year

Yield of EtOH/Ha Has Increased Three Times in the Last 25 Years to 6,000 L/Ha (1,585 gal/Ha) From Rainach (2006)

Ethanol Cost Has Been Reduced Greatly; It Is Now Lower Than That of Gasoline Goldenberg, 2005

In Brazil, 70% of All New Cars Sold Now Are FFVs 20% 40% 60% 80% 100% jan/03 abr/03 jul/03 out/03 jan/04 abr/04 jul/04 out/04 jan/05 abr/05 jul/05 out/05 3% 26% 2% 69% Flex (Ethanol or gasoline) Ethanol (Pure) Gasoline Diesel

No.3 Ethanol Consumption Country with ~340 Million Gallons in 2005 Chinese Corn Ethanol: No.3 Ethanol Consumption Country with ~340 Million Gallons in 2005

Annual Production in tonnes Four Fuel Ethanol Plants in China Produce 340 Million Gallons of EtOH a Year from Grains Company Location Annual Production in tonnes Jilin Fuel Ethanol Co., Ltd Jilin City, Jilin Province 300,000 Heilongjiang China Resources Corporation Zhaodong City, Heilongjiang Province 100,000 Henan Tianguan Group Nanyang City, Henan Provice Anhui BBCA Biochemical Bufeng City, Anhui Province 320,000

Supply of Grain-Based Ethanol in the U.S. and China May Be Limited Population (in million) 296 1306 Gasoline market: billion gallons 140 16 Diesel market: billion gallons 50 24 Corn ethanol production: billion gallon 4.2 0.3 Corn production: million tons 332 128 Arable land: million hectares 186 130

U.S. Biodiesel Production

U.S. Biodiesel Production Has Increased Dramatically and Will Continue to Do So

U.S. Biodiesel Plant Location

Incentives and Policies Have Played a Major Role in Biofuel Use $0.51/gallon incentive for ethanol $1.00/gallon incentive for biodiesel The 2005 Energy Policy Act establishes renewable fuel standards Brazil In early years, government had financial incentives But sugarcane ethanol is now self-sustaining economically China Grain ethanol producers receive RMB 1,200/tonne of ethanol

Potential Adverse Effects of Large-Scale Biofuel Production Land availability in individual countries Food vs. fuel debate Potential soil effects: erosion, carbon depletion, etc. Water pollution by nitrate from intensive farming Water resource requirements Ecological effects of land cultivation for biofuel production